Email this article to a friend

So, its appraisal time again and you're a bit worried that you haven't had the most stellar year. But what protection do you have available to you if your employer decides that your performance isn't meeting expectations?

If you have been employed for two years or more, then you have the right not to be unfairly dismissed. This means that if your employer is not happy with your performance, whilst they can dismiss you for that reason, they should follow a fair procedure before doing so.

In most cases, that will require them to go through some sort of performance management process, giving you the opportunity to respond to the allegations of poor performance in a meeting, the opportunity to appeal any decision, to be set objectives setting out clearly what is expected of you to improve and, usually, to give you a first as well as a final written warning before you are dismissed, with sufficient time in between the warnings to give you a genuine opportunity to demonstrate an improvement in your performance.

Even then, you should still be given your contractual notice on termination, which in many cases in the City is three months (you often won't have to work your notice but will either be paid in lieu of it or placed on garden leave).

That whole process can take some time — given you need time between the warnings to be able to demonstrate whether you have or haven't improved, that means that it's rare for a proper performance management process to take much less than six months to complete. Even then you have the opportunity to appeal each warning and to appeal your dismissal.

That means a lot of time for your manager to document and monitor the performance concerns, the involvement of HR in the process and potentially the involvement of more senior members of staff in the appeals. And even then, some managers, no matter how good they are at their job, would rather pull teeth than actually confront performance concerns head on.

As a result, particularly with employers in the financial services sector, we find that it's unusual for employers to go through a proper performance management process. Rather, they will either enter into what are now called "protected conversations", which allow them to approach employees either before or during a performance management process about being paid off if they leave without the risk that they will be able to treat the fact that they have had that conversation as grounds to resign.

Any employee in that situation is usually required to visit a lawyer to take independent advice on the terms of the settlement agreement presented by the employer — usually that individual cannot waive their legal claims unless they have taken such advice, so in most cases, the employer will make a contribution towards the cost of it.

In considering the amount the individual should accept, relevant factors include the veracity of the performance concerns and the extent to which they are documented, the extent of any oral or written warnings already given, the length of time it is likely to take the individual to find alternative employment after leaving and the likely losses in respect of bonus and other benefits.

If you instruct them to, your lawyer should help you to maximise what you receive. However, it's important to bear in mind that for unfair dismissal, on top of contractual entitlements, the maximum claim is for 12 months' pay or £74,200, whichever is less — and this includes losses in respect of bonus. It's typically only if an employee's dismissal is tainted by discrimination, or is because they have blown the whistle on their employer, that the cap is lifted.

In many cases, this works in the interests of both parties — the employee can make a dignified exit with a cushion to protect them whilst they look for another more suitable position. The employer, in return for a sum of money, saves the time of going through the process, and the risks of a resulting legal claim. We often find that clients who are initially in shock and despair when this sort of process is initiated, after signing on the dotted line, are bright and optimistic about their future.

Julie Morris is a partner at Slater & Gordon

*Have you got a career quandary that requires advice? Email contributions@efinancialnews.com